Losses versus significance of gains
An example of irrational behaviour:
Offer someone a choice of
- a sure $50 or,
- on the flip of a coin, the possibility of winning $100 or winning nothing.
Chances are people will choose the sure $50.
But offer a choice of
- a sure loss of $50 or
- , on a flip of a coin, either a loss of $100 or nothing.
and the person will probably pick the last option.
In reality, the chance of the coin landing on one side or the other is equivalent in any scenario. But people view the possibility of regaining a loss as more important than a greater gain.
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